Subcontractors Achieve Win in Immunity Case- Third Coast Services, LLC & SpawGlass Civil Construction, Inc. v. Castaneda
The American Subcontractors Association’s Subcontractors Legal Defense Fund supported a major win for subcontractors via Amicus briefing to the Texas Supreme Court. In December 2025, the high court took up the matter of Third Coast Services, LLC & SpawGlass Civil Construction, Inc. v. Castaneda, which significantly solidified subcontractor immunity under Texas law by ruling that direct contract (privity) with the Texas Dept. of Transportation (TxDOT) is not needed for immunity under Civil Practice and Remedies Code Section 97.002. This Sections provides for immunity as long as the work is performed “for” TxDOT on state highway projects, even if the contract is with a county. The ruling reversed a lower court decision which held that only the prime contractor was entitled to immunity, thereby expanding protections for subcontractors from suits, such as the fatal 2019 crash on SH 249 in Montgomery County that resulted in substantial personal injury claims being made against the subcontractor and prime contractor. CONGRATULATIONS are extended to Brian Carroll, managing partner, Sanderford and Carroll, P.C., member of the ASA Attorney’s Council, and past President of ASA National, for his work on this important case.
The American Subcontractors Association is actively involved in the promotion of legislative action across the nation and regularly intervenes in legal actions that affect the construction industry at large. The SLDF supports ASA’s critical legal activities in precedent-setting cases to protect the interests of all subcontractors. ASA taps the SLDF to fund amicus curiae, or “friend-of-the-court,” briefs in appellate-level cases that would have a significant impact on subcontractor rights. Contributions to the SLDF may be made online at www.sldf.net.
Texas Freezes HUB program
The state of Texas has paused the Historically Underutilized Business (HUB) program, ceasing new certifications and renewals for minority- and women-owned businesses.
This host program follows the frozen Executive Order GA-55 signed by Governor Greg Abbott, which instructs all state agencies to pursue “color-blind” constitutional protections and ban any government form of discrimination based on race.
Acting Texas Comptroller Kelly Hancock announced the freeze on Oct. 28, explaining that the review of HUB program procedures and rules is underway to ensure full compliance with state and federal constitutions.
Procurement officials clarified that agencies must now perform contracting entirely in accordance with legal race-neutral criteria, which also means that there will be no contract set-asides based on race or sex while the HUB program is on hold.
Eligible businesses may continue to solicit and submit bids for state contracts, but not under any new or newly renewed HUB certification status while the program is suspended.
The HUB program’s future is now in the hands of the review results showing evidence of possible legislative changes when the Texas Legislature meets again. Business owners will have to wait for the new procedures to take effect if they are seeking a certification or an expired certification renewal.
There will be no impact on ongoing contracts or non-HUB reporting.
ASA and ASA CA Urges the California Supreme Court to Review a Decision that Creates Substantial Instability in California’s Construction Industry and Threatens the Economic Survival of Thousands of Licensed Subcontractors.
The American Subcontractors Associations’ Subcontractors Legal Defense Fund supported an Amicus Letter in Support of Petition for Review in the Pacific Carpets, LLC v. 2525 Main Apartments, LP, et. al., Case No. S294545.
ASA is a national trade association representing more than 7,000 subcontractors and specialty trade contractors, including thousands of members performing work throughout California. Our members routinely undergo lawful business entity conversions-from corporations to limited liability companies or vice versa-for tax planning, succession, insurance, and liability management. These conversions are expressly authorized and encouraged under California law.
The current decision, however, holds that such a lawful entity conversion may render a long-licensed contractor “never licensed” for purposes of Business and Professions Code section 7031, triggering catastrophic forfeiture of all compensation and extinguishment of constitutional lien rights-even when:
- the same Responsible Managing Officer continuously supervised the work,
- the same license classifications were maintained throughout,
- the same business operations continued without interruption, and
- the processing delays were caused by the government agencies that issue the license.
If left standing, this ruling will place virtually every California subcontractor at risk of total economic loss whenever a routine corporate conversion occurs and administrative processing is delayed. Such a result conflicts directly with Corporations Code section 1158, undermines decades of settled construction practice, and transforms section 7031 into a weapon of unjust forfeiture rather than a consumer-protection statute.
The resulting uncertainty is already affecting contract negotiations, insurance underwriting, and project risk allocation throughout the industry. Subcontractors cannot predict whether lawful corporate restructuring will later be used to impose multi-million-dollar forfeitures after work has been completed and accepted. Owners and lenders are increasingly weaponizing section 7031 as leverage in commercial disputes unrelated to public safety or contractor competence.
This Court’s guidance is urgently needed to:
- harmonize section 7031 with California’s corporate conversion statutes,
- clarify the proper scope of the substantial compliance doctrine,
- prevent government-caused delay from serving as the basis for mandatory forfeiture, and;
- restore predictability to California’s construction
The issues presented in the petition are of exceptional statewide importance. They directly affect thousands of construction businesses, tens of thousands of workers, and billions of dollars in annual construction activity. ASA respectfully submits that review is not only appropriate but also necessary.
The American Subcontractors Association is actively involved in the promotion of legislative action across the nation and regularly intervenes in legal actions that affect the construction industry at large. The SLDF supports ASA’s critical legal activities in precedent-setting cases to protect the interests of all subcontractors. ASA taps the SLDF to fund amicus curiae, or “friend-of-the-court,” briefs in appellate-level cases that would have a significant impact on subcontractor rights. Contributions to the SLDF may be made online at www.sldf.net.
Founded in 1966, ASA promotes the rights and interests of subcontractors, specialty contractors and suppliers by building strength in the community through education, advocacy, networking and professional growth. ASA adheres to and promotes quality construction, ethical and equitable business practices, safety in the work environment, and best industry practices. For more information about ASA, visit www.asaonline.com, and for more information about the SLDF, visit www.sldf.net.
Contact: Mike Oscar
(703) 684-3450, Ext. 1322
moscar@asa-hq.com
ACI and GLOBE sign MOU to Promote Sustainable Construction Practices Worldwide
The American Concrete Institute (ACI) and the Global Consensus on Sustainability in the Built Environment (GLOBE) today announced that the two organizations have signed a memorandum of understanding (MOU) to foster collaboration and cooperation between the organizations. Through the MOU, both organizations commit to improving sustainable concrete construction by making the relevant technical expertise of each organization available through publications, meetings, conferences, committee membership, and other strategic initiatives. As such, ACI and GLOBE encourage all stakeholders in the construction industry to share knowledge to identify, direct, and implement changes needed in present best practices to reduce greenhouse gas emissions and promote sustainable construction. More…
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